The revelation follows yesterday's Herald Sun report that a terrorist suspect with links to Osama bin Laden has been living illegally in Victoria for five years.

"Here we have a man who was found to have probable links with the Taliban and Osama bin Laden and yet he has quite happily been living unmolested in Australia for the past three years," said Dr Rory Hudson, who chaired the Refugee Review Tribunal.

"On the evidence I heard he poses a danger to the community and there is a high risk he has already done something bad in Australia.

"I cannot believe that in three years it's not been possible to find a way of taking this person out of Australia.

"He should be restrained or at least subject to surveillance."

Of the 8500 people on the run in Australia, about 4000 are believed to be working illegally - many in full-time jobs.

Almost one in eight of failed applicants in the past six years went into hiding to escape being deported, according to the office of Immigration Minister Philip Ruddock.

Friends of the 34-year-old terrorist suspect living illegally in Victoria deny he is a terrorist and that he is being protected by the local Palestinian community.

In other developments:

THE US told NATO leaders yesterday it would gather more information about bin Laden's terrorists before it launched military strikes against them.